Russia invasion of Ukraine will have significant economic repercussions, impacting global economic recoveryLeaders of the World Bank and the IMF have warned on Thursday, signaling that they were ready to help Ukraine.
IMF Managing Director Kristalina Georgieva said she was “deeply concernedon the impact of fighting on the people of Ukraine, and warned in a tweet that the conflict”adds important economic risk for the region and the world.”
The Monetary Fund international continues to assess the economic impact, but “will stand ready to support our members as needed,” she said.
The Washington-based crisis lender is in the process of deploying $2.2 billion in assistance to Ukraine under a loan program set to finish in June.
Georgieva said the fund could provide assistance to other countries affected by any ripple effect of conflict, if necessary.
On Twitter, World Bank President David Malpass said he was “deeply saddened and horrified by the devastating developments in Ukraine, which will have vast economic prospects and social implications.”
He added that the Washington-based company development lender “getting ready options for big support to the people of Ukraine and the regionincluding immediate budget support.”
The Snowball Conflict already caused oil prices to skyrocket highest level since 2014, adding to concern global inflationary pressures.
In January, the IMF reduced its world GDP forecasts for 2022 at 4.4%, half a point less than son previous estimate in October, due to “impediments” caused speak latest coronavirus outbreak.
US President Joe Biden on Thursday announced strict new punishments on Moscow, including frost assets of major banks and cutting off high-tech exports to the country, in coordination with Europe.
However, analysts note that Moscow has prepared for years to resist such sanctions, building up a war chest of cash and gold, and has very little debt.
“It’s no coincidence. I think a lot of it is of what we call fortress russia strategy”, said Elina Ribakova of the institute of International finance, a global banking group.
“It was a very deliberate change in macroeconomic policy to meet geopolitical ambitions,” she told Agence France-Presse (AFP). “They have a piggy bank bank who can protect them.”
The conflict could also change the Federal Reserve’s calculus when it comes to fighting inflation in the United States, a powerhouse bank official said Thursday.
The Fed next month should increase rates for the first time since COVID-19 broke out but it may take move more aggressively if the Ukraine crisis disrupts commodities and drives up prices.
Loretta Mester, President of the Cleveland Federal Reserve Bank, the US central said bank monitor the impact of the conflict on the world is the most grand economy.
“The implications of the unfolding situation in Ukraine for the way-run economic perspective in the United States will also be a consideration in determine the right pace at which to remove housing,” she said in a speech.